Local producers’ prices up in April

Domestic producer prices in the manufacturing sector continued to rise in April, led by upticks in the selling prices of petroleum, tobacco and beverages, the Philippine Statistics Authority (PSA) said yesterday.

The Producer Price Index (PPI) for manufacturing grew 0.5 percent in April 2018 from negative 0.7 percent in March and negative 1.7 in April 2017.

Growth in the index has been consistent since January 2018.

The PPI measures the growth in the selling prices received by manufacturers and is an indicator of inflation trend in the economy like the consumer price index (CPI) which measures inflation from the perspective of the consumer.

Prices of goods and services in the country rose at a faster pace of 4.5 percent in April from 4.3 percent in March and 3.2 percent in April 2017.

The central bank expects inflation to shoot up to a record 4.6 percent in May.

In the report on the Nikkei Philippines Purchasing Managers’ Index (PMI) in April, IHS Markit said inflationary pressures remain a concern for producers as “supply chains come under pressure.”

Higher prices of fuel, industrial metal, sugar, and paper pull up average cost burdens. This is aggravated by the weak exchange rate.

Because of this, firms implemented another round of price hikes to pass on the higher costs to customers.